The Secret to the Weston Family’s Wealth Is Exploitation, Not Hard Work

Canada’s ruling class is fond of praising the Westons for representing an ethical form of capitalism. This couldn’t be further from the truth. The Westons made their fortunes by ruthlessly exploiting workers.

Galen and Hilary Weston at an event in London, England, 2014. (Ben A. Pruchnie / Getty Images for Selfridges)

Disgraced ex-media magnate Conrad Black recently used the pages of his former newspaper to justify the fortunes of the Weston family, the owners of Loblaw Companies Ltd. The wealth of the retail family are, Black claimed, the result of “talent,” “savvy,” and “ability.” The article — an obit for Galen Weston in the National Post — is a pitch-perfect example of elite back slapping and mutual approbation.

Black writes fondly of the Westons’ “novel form of Christian capitalism;” the “inborn altruism of their companies;” and their noble “policy of seeking no or minimal public recognition for their good works.” The narrative that Black spins about the heroism of the Westons’ business acumen is ludicrous — it could only have come from a fellow traveler of Canada’s ruling class.

Funnily enough, one does not need to rely on leftist caricatures to find a rejoinder to Black’s fanciful hagiography. The Westons and their surrogates have stated clearly that a program of wage and job cuts as well as monopolization have maintained the family’s wealth.

Business practices which do not figure into Black’s fawning account of the family empire are the cause of the Westons’ immense fortune. Although, you wouldn’t know this from reading the National Post’s glowing obituary of Galen Weston. Black’s gloss on the family is exemplary of the grand lies that elites tell one another about themselves. It is exactly this sort of pageantry that creates the misconception that what is good for business is, in fact, good for everyone.

The Westons: Economic Royals Straight From Central Casting

On the north end of Vero Beach on the coast of Florida sits Windsor, the sprawling estate of the billionaire Weston family and other giants. This “plutocrats’ paradise” hosts over two hundred fifty mansions, a polo field, rows of beachfront streets named after Weston companies, and the former residence of the notoriously widely traveled King Edward VIII. Alongside Galen and Galen Weston Jr, Windsor has hosted Polish aristocrats, Amway CEO Dick DeVos, the Swarovskis, André Desmarais, and, of course, Conrad Black.

Black — the inheritor of major stakes in the Ravelston Corporation, the Argus Corporation and, by extension, Massey Ferguson, Hollinger Mines, and more — has a profound respect for the late Galen Weston. Perhaps this feeling of amity stems from both men’s background as inheritors of massive wealth. Galen Weston inherited his fortune via his stake in George Weston Ltd.

Black insists that Galen Weston — “the scion and continuator of a great family” — will be “fondly remembered”:

The highly competitive retail business in several countries confirms the remarkable fact that four consecutive generations of the Weston family have been outstandingly successful in their chosen profession.

Black observes that the Westons had the “tastes and habits of hereditary wealth”: polo, real estate, and religion were their pastimes. Missing in Black’s account is any explanation of where the Westons’ wealth actually came from.

Black does give us a thumbnail sketch of the Weston story. George Weston founded a bakery in Toronto in the late 1800s. It was his son, W. Garfield Weston, who fatefully purchased shares in Loblaw — at the time a provincial food chain — with a “benign fervor.” The family business, George Weston Ltd, became the parent company of Loblaw. Garfield’s son, Galen, exhibited “a seamless generational evolution.” Above all, Black says, the Westons dedicated the “fruits of their efforts” to the “unquestionable good of the population in all of the countries where they have operated.”

The Westons themselves, however, appear to share no such illusions about their business or its modus operandi. The actual story is as follows: George Weston opened his bakery in 1882, in the early years of Canada’s wheat boom. The company was renamed G. Weston’s Bread Factory in 1890, when it added mechanical mixers and expanded the factory’s workforce. But, as early as 1905, George Weston took advantage of a loose labor market to lower the wages of his fifty-five employees. When these workers went on strike, Weston threatened to fire them, telling one local paper: “I never saw so many men willing to step in and fill the vacant places.”

George Weston died in 1924. He passed his fortune down to his son, W. Garfield Weston, the “biscuit King.” In the early days of the Great Depression, he went on a “buying spree,” acquiring competitor bakeries amidst economic crisis. In 1939, he was elected as a British Conservative MP but would leave politics four years later. His “business empire,” he claimed, would “best serve this country and my native Canada and the Empire as a whole.”

According to Maclean’s, by 1948, the family empire had “outposts in six of the United States and [had] spread to India, South Africa and the West Indies.” By 1955, his shares in Loblaws gave him control of 156 stores, $220 million in assets and effective market dominance, across Canada, through the postwar boom.

Dominion Stores — headed by Bill Horsey with the backing of the Argus Corporation — was Loblaw’s only real rival. This limited competition wasn’t won by Weston’s “savvy” or “generosity” but with economies of scale — massive facilities, “strategically located in mass market areas.”

Weston was keen to move production to lower-wage jurisdictions, especially apartheid South Africa. Dismissing any suggestion that black South Africans were being mistreated, Weston said, of his factories in the country: “Basuto boys can work two or three months and then go back into the jungle and buy another wife.” A supporter of apartheid, he is on record as having opposed the extension of voting rights to black South Africans for fear that it would mean that “every black pickaninny or mammy can call on the government for solutions to every social problem.”

Exploiting low-wage labor abroad has been key to the Westons’ wealth for decades. Their apparel brand, Joe Fresh, made headlines in 2013 after one of its suppliers, the Rana Plaza garment factory in Bangladesh, collapsed, killing more than a thousand workers. The victims still haven’t been fully compensated.

In Canada, in the early postwar boom, the Westons’ workers, organized chiefly by the Retail, Warehouse And Department Store Union, did secure a few collective agreements and even wage increases. But the gains would not last.

“Ruthless Cutting”

In 1968, the company’s board brought Galen Weston on to manage Loblaw, by then one of Canada’s largest employers. At the time, sales were slowing down. Having already introduced layoffs across the franchise in the mid-1960s, the Globe described Weston’s response to flagging earnings as: “A massive restructuring, notable for ruthless cutting of assets and personnel.”

By 1972, facing lower-cost competition from Dominion, Loblaw “sold off” more than two-thirds of its stores. At the same time, Argus’s new owners — led by none other than Conrad Black — were slowly selling off Dominion’s assets. The two companies appear to have spent much of the 1970s and ’80s mimicking one another.

In 1987, Weston purchased “all that remained of the former Dominion stores” for $40 million. However, the acquisition left the problem of Dominion’s pension surplus fund outstanding. The fund had been a particular sticking point since at least 1985, when management, described by the Toronto Star as “Black and his Partners,” changed the pension plan to allow them to “withdraw” $37.951 million.

Defending the change, Black claimed management was, in fact, the victim. “A felonious minority of employees had been in the habit of stealing $30 million a year from Dominion inventory.”

While the Supreme Court of Ontario censured Black and his partners in 1986 and ordered them to return to surplus, the workers were not guaranteed their full pensions in the sale. As the Globe and Mail noted on February 3, 1987:

The union and Domgroup also struck an agreement over the distribution of $60-million in surplus pension funds, subject to the approval of the Pension Commission of Ontario and the courts. The proposal calls for giving members one-half of the funds from the former Dominion Stores pension plan.

In 1988, the Globe noted that Galen Weston, the owner of 58 percent of George Weston Ltd, was one of the hundred wealthiest men on earth. That same year, the firm tasked its new CEO Richard Currie with generating further “profit improvements.”

The directive was clear, and Currie took up his task with relish. In a speech, transcribed by the Ivey Business Journal, Currie explained that competition from anti-union employers like Walmart, coupled with a flagging economy, condemned Loblaw to a “slow growth” future. Explaining the company’s slump, Currie claimed that “weak management had allowed the store asset base to erode and had provided fertile opportunities for labor unions.” Accordingly, to survive, Loblaw would have to “stretch” its “variable costs.” Making the case for cutting worker’s pay, Currie deployed staple business-speak to make his case:

Profit improvements in the 1990s are likely to come primarily from bottom-line cost reductions and lowered breakeven points rather than from the top-line sales and margin expansion strategies much more common in the 1970s and 1980s.

In 1994, during negotiations with the United Food and Commercial Workers at Zehrs and Fortinos, Currie was more explicit, telling the Globe: “We’re looking to lower our labor costs relative to sales.” In June 1997, Currie philosophized about big-picture concerns: “Operating with a unionized workforce… may in fact be obsolete.”

Since the 1990s, Loblaw’s successive annual reports have indicated returns on investments “far above” the Toronto Stock Exchange (TSX) average. But the demand for cuts hasn’t stopped. Loblaw’s unionization rates have hovered at about 50 percent. In nearly every dispute it has had with employees, the company has fought tooth and nail to cut workers’ pay, scheduling rights, and benefits. As it has clawed back all the past gains of unionization, the Westons’ family wealth has grown.

In 2006, Galen Weston Jr took over as Loblaw’s CEO. At the time, Maclean’s noted that this changing of the guard was in advance of “an imminent strike by unionized workers in Ontario.” The strike was in response to management’s demands for wage cuts.

In 2010, seventeen hundred workers in Sarnia, Chatham, and Windsor faced wage and benefit cuts of up to 25 percent. Loblaw’s public relations VP justified the cuts in the name of “operational flexibility.” In 2018, Loblaw’s executives further opposed a credit union shareholder proposal to pay its workers “the income necessary to support families.” The directors said this would again “restrict” the company’s “competitive flexibility.”

More recently, after cutting workers’ Pandemic Pay, Weston demanded cuts to COVID-19 support for the unemployed. In a public letter to the Business Council of Canada, Weston and his coauthors argued that elevating the unemployed above abject poverty is unacceptable because it may mean that “employees lack incentives to return” to low-wage work. Meanwhile, over the course of the pandemic, the company’s profits have risen sharply and its billionaire owners have only gotten richer.

“The Tastes and Habits of Hereditary Wealth”

Black’s recent blandishments are not without precedent. The two sat on Canadian Imperial Bank of Commerce (CIBC)’s board together for decades. And as Black recounted in his memoir, A Matter of Principle, when he faced allegations of embezzlement in 2003, and most of CIBC’s board members advised him not to seek reelection, Weston was one of the few to offer him any sympathy.

Black’s latest celebration of Weston, however, discloses a more awkward truth. The efforts of George Weston, Garfield Weston, Galen Weston, and Galen Weston Jr have never actually helped to strengthen the social fabric of the communities or countries in which they have done business.

For over a hundred years, the secret ingredients that have made their firms dominant have been a lack of competition and poverty wages. In the face of these facts, Black writes that, “A substantial portion of the fruit of their efforts has thus accrued directly to the foundations and the unquestionable good of the population in all of the countries where they have operated.”

Black’s is the Master’s Voice, unadorned. His view is a textbook example of the depoliticization of the interests of the business class. It is a narrative that asserts that the goals of business are virtuous, full stop. But, of course, the claim that exploitative practices — that are reviled by the population at large — are actually sound, commonsense conventions that are in the national interest is preposterous.

Black’s fawning obit does us all a favor by exposing something that the ruling class are often too guarded to reveal: that they believe the rich deserve their fortunes because they are morally superior to the people they exploit. What we see in these defenses of wealth is a return to a justification of inequality which has its origin in feudal conceptions of the natural inferiority of the poor.

It is therefore no surprise that Black can laud the billionaire family for having the “tastes and habits of hereditary wealth.” We should take the fact that the Right is emboldened enough to speak plainly about their views to speak plainly about our own — against inequality and for equality; against “hereditary wealth” and for socialism. The Westons’ fortune should be put in the hands of the talent that actually created it — Loblaw’s thousands of ill-treated, low-wage workers.